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TRADE WARS
G20 frets over global economy amid US-China trade war
By Richard CARTER and Hiroshi HIYAMA
Fukuoka, Japan (AFP) June 9, 2019

China's exports beat forecast to rise as trade war heats up
Beijing (AFP) June 10, 2019 - China's exports beat gloomy forecasts to rebound in May though imports sank more than expected as the trade war with the United States heats up, official data showed Monday.

The spat between the world's top two economies escalated last month, with President Donald Trump increasing tariffs on $200 billion in Chinese goods.

But Chinese exports to the world bounced back to rise 1.1 percent last month after falling 2.7 percent in April, according to customs data. Analysts surveyed by Bloomberg News had forecast a 3.9 percent drop.

Imports, however, plummeted 8.5 percent after rising 4.0 percent in April.

The trade surplus surged to $41.7 billion in May compared with $13.8 billion the previous month.

Trade talks between the United States and China have stalled while the two countries have threatened to slap more sanctions on each other.

Trump has blacklisted Chinese telecom giant Huawei and warned that he could impose tariffs on nearly all remaining products from China, worth more than $300 billion.

Beijing responded to Trump's latest tariff hike by increasing levies on $60 billion in US products on June 1.

China is also preparing its own blacklist of "unreliable" companies and has suggested that it could halt exports of rare earths -- key to the production of many high-tech goods -- to the United States.

Trump is expected to meet Chinese President Xi Jinping at the G20 summit in Japan at the end of the month.

US Treasury Secretary Steven Mnuchin said at a G20 meeting of finance ministers Saturday that any potential deal with China will wait until the two presidents meet later this month, but Washington was ready to impose new tariffs if talks fail.

The world's top finance policymakers Sunday weighed the impact of ballooning trade tensions on the global economy amid differences over the extent to which they are dragging on growth.

Finance ministers and central bank chiefs from the G20 group of the world's top economies are expected to note the "downside risks" to the global economy from trade battles, notably between the top economic superpowers China and the US.

Japanese Finance Minister Taro Aso, who is hosting the talks, told reporters as the first day of talks wrapped up on Saturday that the world economy should "firm" in the second half of the year but "downside risks still remain."

Aso said "market confidence could be eroded" if there were no rapid resolution to the ongoing trade war between Beijing and Washington, which has seen the world's top two economies impose billions of dollars of tit-fir-tat tariffs and threaten even tougher action.

IMF chief Christine Lagarde singled out trade tensions as the "major" headwind facing the global economy, adding that it was a "significant risk on the horizon," in an interview with Japan's Nikkei daily on Sunday.

Lagarde has previously described the trade wars as a "self-inflicted wound" and warned that US-China tariffs so far imposed and threatened could trim 0.5 percentage points off global GDP growth next year -- an amount $455 billion larger than the entire South African economy.

Meanwhile, French Finance Minister Bruno Le Maire said there was a "real risk" that "this global economic slowdown could turn into a global economic crisis due to trade tensions."

"A worsening of the international climate and a real trade war would lead to an even more marked slowdown in global growth, with a direct impact on our jobs, companies, factories and sectors," Le Maire told AFP in an interview on the sidelines of the meeting.

A Japanese official who declined to be named briefed reporters that "very many countries voiced concerns that escalation of the trade friction is a very significant downside risk to the world economy. That is a fact."

- 'Big economic opportunity' -

However, the treasury secretary from the US, which continues to threaten more tariffs on China if there is no trade deal, played down the risk of a global economic conflagration.

"Clearly there is a slowdown in Europe, there's a slowdown in China, there's a slowdown in other parts. I don't believe that's as a result of trade tensions. That slowdown has gone on for the last year," Steven Mnuchin told reporters on Saturday.

He acknowledged that other policymakers had voiced concerns over the economic impact of a prolonged trade war but pointed to a potential boon for other countries.

As companies move out of China in order to avoid US tariffs, "there's going to be a big economic opportunity for a lot of other countries," he said.

"There will be winners and losers," he predicted.

Nevertheless, Mnuchin also pointed to the positive boost to the world economy that could result from a breakthrough in trade talks, likely to be the main focus of a meeting between the US and Chinese leaders at a G20 summit later this month.

"I think if we get a deal, it's a very positive thing for economic growth, for us, for China, for Europe, for the rest of the world. The opening of these economies tends to lead, in my mind, to more growth on both sides," said Mnuchin.

US leaves door open to China on trade talks at G20
Fukuoka, Japan (AFP) June 8, 2019 - The United States is open to further negotiations with China on their ongoing trade battle but any potential deal will wait until the two leaders meet at the end of the month, Washington's top finance official said Saturday.

Speaking to reporters on the sidelines of a meeting of G20 finance ministers and central bank chiefs, Treasury Secretary Steven Mnuchin warned that Washington would press on with tariffs if a deal could not be reached.

"We were on the way to a historic deal. If they want to come back to the table and complete the deal on the terms that we were continuing to negotiate, that will be great. If not, as the president said, we'll move on with tariffs," said Mnuchin.

President Donald Trump is expected to meet his Chinese counterpart Xi Jinping at the G20 summit in Osaka on June 28-29 and any potential breakthrough would likely only come then, he predicted.

"I would expect that the main progress will be at the G20 leaders' meeting between the two presidents," he said.

Mnuchin said that although he would be holding one-on-one talks with Chinese central bank chief Yi Gang during the G20 finance meeting in the western Japanese city of Fukuoka, this would "not be a negotiating meeting".

"We've been hard at work on what could be a historic agreement for both countries, something that could be economically very important for us and China and for the rest of the world," he said.

However, he insisted that the current trade relationship between the world's top two economies was "very unbalanced."

"Our markets are completely open to them. Their markets have not been open to us," he said.

He said Washington and Beijing had been "90 percent done" on clinching a trade deal before talks collapsed but stressed that the current position was "a result of them backtracking on significant commitments."

Trump said on June 6 that he would wait until after the G20 summit before deciding whether to impose new tariffs on Chinese goods that could be worth $325 billion.

"The critical meeting will be between the two presidents," said Mnuchin.

- 'Great outcome' -

The treasury secretary said he did not believe that the current trade tensions were harming the global economy, one of the key topics being discussed by G20 officials in Fukuoka.

"So I don't think in any way that the slowdown you are seeing in parts of the world are the result of trade tensions at the moment," he said.

Nevertheless, if a deal were found, it would be a boon to the global economy as a whole, he predicted.

"People talk about the economic risk of trade wars... people should be even more focused on the benefits of having a great trade agreement and how that creates economic opportunities in both economies, especially for a growing middle-class in China," he said.

The potential economic benefits for China were "part of the reason I don't understand why they went backwards because I think this could be a great outcome for them".


Related Links
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TRADE WARS
China warns its citizens of police harassment, crime in US
Beijing (AFP) June 4, 2019
China on Tuesday issued a pair of travel alerts to its citizens going to the United States, warning them about police harassment and crime as tensions soar between the global powers. The world's two largest economies have been locked in a protracted trade war, and any major drop in Chinese tourism to the United States could cost billions to the US economy. While it did not threaten to curb tours to the United States, China has used tourism as a weapon during previous diplomatic rows with South K ... read more

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